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Fires sap consumer confidence, job ads

Alex Druce
Consumer confidence has dropped to a four-year low

Consumer confidence and job ads have slumped amid a plume of bushfire smoke, with hopes for an improved economic position the bleakest since 1994.

The ANZ-Roy Morgan Australian Consumer Confidence index dropped 1.7 per cent last week, which economists said almost certainly reflected the impact of the catastrophic bushfires that have plagued communities across the eastern states.

The weekly measure of consumer mood, which is based on about 1,000 face-to-face interviews conducted in people's homes on Saturdays and Sundays, showed the perception of current economic conditions was down by a massive 12.9 per cent - falling to the lowest level since the global financial crisis.

ANZ head of economics David Plank said the result was not surprising, and may even understate the weakness in consumer sentiment given the New Year period is traditionally strong.

"Against the usual seasonal gain of recent years, confidence has started 2020 in very poor shape and at its lowest level in more than four years," Mr Plank said on Monday.

Sentiment around Australia's future economic conditions fell by 8.1 per cent over the week to the lowest level since 1994, although survey responders were more positive about their current and future personal finances.

"This offers the prospect that the impact on overall consumer confidence from the weekend's terrible events may be relatively short-lived," Mr Plank said.

"We are mindful, of course, that there is likely still bad news to come about the impact of last weekend's fires."

ANZ also expects the nation's underperforming retail sector to have rebounded modestly in November, in part due to the Black Friday sales.

Meanwhile, ANZ's measure of Australian job ads fell by a seasonally adjusted 6.7 per cent in December - the largest monthly decline since May, when job advertising took a hit amid uncertainty over the federal election.

ANZ senior economist Catherine Birch said job ads are now down 18.8 per cent on a year ago, and are at the lowest level since April 2016.

"In the final two weeks of December, the number of job ads declined by more than we would expect for that time of the year, suggesting that the escalating bushfire crises had an impact," Ms Birch said.